electronics retailer
Ceconomy expects further delivery bottlenecks
The more than 1000 Media Markt and Saturn stores should continue to play an important role in the Ceconomy group. Photo: Armin Weigel/dpa
© dpa-infocom GmbH
Popular products could also become scarce again in the coming Christmas season. In any case, Germany’s largest electronics retailer is preparing for disruptions in the supply chains with its Media Markt and Saturn chains.
Germany’s largest electronics retailer Ceconomy (Media Markt, Saturn) expects problems due to delivery bottlenecks in the coming Christmas business due to the corona pandemic and the war in Ukraine.
“We expect disruptions and are prepared for them,” said CEO Karsten Wildberger. The situation is tense. The group will take this into account when purchasing and, if necessary, increase its inventories.
Over-the-counter business recovers: sales increase
At the beginning of the year, however, the electronics retailer with its Media Markt and Saturn chains initially benefited from the elimination of corona restrictions. Sales rose from 4.3 billion to five billion euros in the months of January to March. Adjusted for currency and portfolio effects, sales were 18.8 percent higher than in the same quarter of the previous year, which was characterized by the corona-related lockdown in important markets. The operating loss (EBIT) adjusted for special effects fell from 146 million euros to 62 million euros. The bottom line was a loss of 21 million euros.
The increase in sales was mainly due to the recovery of the stationary business in Germany and in Western and Southern Europe thanks to the reopening of the stores. The online business of Media Markt and Saturn, which had helped the group through the lockdown, lost some of its importance again. In the second quarter of the 2021/22 financial year, the e-commerce share of total sales shrank to a good 25 percent. During the lockdown it was at times almost 50 percent. In the medium term, the group is aiming for an online share of around 30 percent.
The more than 1000 Media Markt and Saturn stores should continue to play an important role in the group. “We want to strengthen our stationary business,” said Wildberger. Looking ahead, thanks to new, smaller formats, there will probably be more markets than fewer in the future.
Slight increase in sales expected
The manager is confident about the further course of the year. Even though rising inflation and the war in Ukraine are currently affecting the consumer climate, the electronics retailer is anticipating a slight increase in sales.
Ceconomy is not represented in Russia and Ukraine; the company left the Russian market in 2018. The only commitment in Russia is a 15 percent financial stake in the electronics retailer M.video. However, the company does not exercise any rights there, it said. With the help of an expert, Ceconomy corrected the market value of the investment from 138 million to 43 million euros because no reliable estimate can be derived from the available price data on the Moscow stock exchange, according to Ceconomy.